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REPORT

Datto’s 2018 State of the MSP Report Follow us on Twitter: @Datto Subscribe to our blog: www.datto.com/blog

2018 MSP Challenges and Trends, Stat-by-Stat Datto surveyed roughly 2,300 managed service providers (MSPs) worldwide about their day-to-day lives. The result: a wealth of statistics about the state of today’s MSPs, including everything from basic demographics and media consumption preferences to business goals and challenges.

With Datto’s Global State of the MSP Report, we aim to provide an accurate profile of managed services today, the good, the bad, and the ugly. By sharing these insights with the channel, we aim to spread awareness about the struggles of today’s IT service providers and offer the community a variety of resources and solutions for mitigating these common pain points.

3 | datto.comA21-29 - 12% A30-39 - 30% A45-54 - 32% A55-64 - 19% A65-74 - 6%

A21-2912%

A30-3930%

A40-4932%

A50-5919%

A60-696%

DEMOGRAPHICS OF MSPs

SEX

AGE

EDUCATION

Takeaway The average MSP is male, college-educated, and between the ages of 30 and 59. No major surprises there.

Male

87%Female

13%

4 Year College

45%

Graduate School

15%Other 1%

2 Year College

12%

High School

8%

3 Year College

7%

1 Year College

6%

Some Graduate School

6%

A21-2912%

A30-3930%

A40-4932%

A50-5919%

A60-696%

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THE BUSINESS OF MANAGED SERVICES

CLIENTELE

ANNUAL REVENUE

Takeaway Most MSPs serve less than 100 clients, offer 1 year contracts, and still offer break-fix services in some shape or form.

1-100 Clients

60%

101-200 Clients

20%

1 year

57%

Other (month-to-month, 2 years)

10%

5 years

2%

3 years

31%

201-300 Clients

6%301-400 Clients

4%401-500 Clients

2%

501+ Clients

8%

STANDARD CONTRACT LENGTH

$1 - $100,000

9%

$100,001 -$500,000

22% $500,001 - $1M

16%

$1M - $5M

36%

$5M-$10M

9% $10M-$50M

6% $50M+

2%

STILL OFFERING BREAK-FIX SERVICES?

75% OF MSPs SAID, “YES.”

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SPECIALIZED SERVICES

Takeaway More than 50% of MSPs specialize services for the Healthcare industry.

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Operations Made MSPeasy

TOP INDUSTRIES TARGETED BY MSPS

“Focusing on a specific vertical can be efficient from an operations standpoint because you’re providing similar services for all or most of your clients.” -Dale Shulmistra, Invenio IT

Healthcare53%

Manufacturing48%

Finance49%

Legal 45%

Non-profits 44%

Construction 39%

Education32%

Real Estate30%

Government24%

Startups21%

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GO-TO MSP BUSINESS RESOURCES

TakeawayTo keep on top of industry trends, MSPs subscribe to a variety of channel publications, including The Channel Co, Channel Futures, and Channel Partners.

“I start each day reading tech, marketing, and business articles to keep up with everything. I pass the good articles to my staff to keep them informed.” -Dale Shulmistra, Invenio IT

2. Referral (colleague) 24%

3. Industry Forum 15%

4. Other 5%

56%

Top Channel Sites for Staying Up-to-Date on Industry Trends:

Datto Downtime Blog

Other favorites:

Tweakers, Reddit,

CompTIA,

Spiceworks

Top Resources for Evaluating a New Product/Service:

1.

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MSPs AND THE DAILY COMMUTE

HOW DO YOU COMMUTE TO WORK?

Personal Vehicle

80%

Work from Home

9%

Bike/Walk

3%

Train/Bus

5%

Other 3%

Takeaway The majority of MSPs experience a short commute (under 1 hour) and rely on their own vehicles to get them to and from the office.

HOW LONG IS YOUR DAILY WORK COMMUTE (ONE-WAY)?

<30 mins 67%

30-45 mins

20%

45min-1 hour 8%

1 hour+ 5%

<30 mins: 67% 30-45 mins: 20% 45 mins - 1 Hour: 8% 1 Hour +: 5%

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TOP 10 GLOBAL MSP CHALLENGES IN 2018

TakeawayIn 2018, the majority of managed service providers are struggling with Marketing and Sales efforts.

Marketing/Sales

53%

Staffing/Training

41%

Growing Pains

28%Ransomware/Cybersecurity

26%

Internal Operations

25%

Pricing Services

22%

Customer Service

19%

Changing Tech Landscape

17%

Vendor/Tech Issues

14%

Selling BCDR*

11%

*Business Continuity & Disaster Recovery (BCDR)

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MSPs AND SCREEN TIME

TakeawayThe channel has spoken. For the majority of MSPs, the force is very much with Star Wars.

MSPS ARE BINGING: STAR WARS OR STAR TREK?

Star Wars 68%

Star Trek 32%

Game of Thrones

Stranger Things

Black Mirror

</>Mr. Robot Vikings

The Good Doctor

This is Us Walking Dead

Big Bang Theory

DesignatedSurvivor

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MSPs GET SOCIAL

TakeawayBelieve it or not, the majority of IT service providers are active on social networks every single day (Facebook + LinkedIn especially). But when it comes to socializing with industry peers, Reddit is the go-to forum of the channel.

Number of Hours Spent (Per Day) on Social Media:

1. Reddit 2. Spiceworks 3. ASCII 4. HTG Forums 5. Robin Robins

6. Experts Exchange 7. CompTIA 8. Autotask 9. LinkedIn Communities

10. LabTechGeek

Are you using Social Media? YES 92%

NO 8%

less than an hour 62%

2-3 hours26%

4-5 hours4%

Don’t use social Media 8%

Which of the following Social Media networks do MSPs use on a daily basis?

70%

54%

29%

12%

6%

2%

27%

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MSP PAIN POINT #1: MARKETING/SALES

TakeawayThe majority of MSPs struggle with a strong lead generation strategy in their marketing plan.

“Role-playing allows you to get more comfortable with the act of cold calling and work out any kinks. It also enables employees to bounce ideas off one other and share strategies that work best for them. It may feel silly, but it truly works..” -Eric Torres, Datto (and Former MSP)

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EBOOK

Cold CallingMade MSPeasy

1. Lead Generation 3. Cold Calling

2. Hiring Sales Talent 4. Market Differentiation

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MSP PAIN POINT #2: STAFFING/TRAINING

TakeawayThe #2 pain point for MSPs? Recruiting quality technical, sales, and marketing candidates.

“The majority of our employees come from relationships we have in the community. We’ve built a good reputation over time, so people are talking about us —that attracts candidates.”

- Jordi Tejero,

CRS Technology Consultants

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1. Recruiting Tech, Sales, Marketing

2. Employee Training

4. Employee Retention

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MSP PAIN POINT #3: GROWING PAINS

“My biggest challenge? Transitioning from a small MSP where owner wears multiple hats to hiring a sales and marketing person to amp up the sales.”

TakeawayAs MSPs grow, the lack of time and resources prove to be their biggest challenge. As a result, operational efficiency and service consistency tend to suffer.

EBOOK

7 Best Practices of Successful MSPs

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1. Lack of Time & Resources 3. Standardization of Policies/Services

2. Being Consistent after a Merger or Acquisition 4. Operational Efficiency

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MSP PAIN POINT #4: RANSOMWARE/CYBERSECURITY

“Ransomware is a big problem, but it’s also a big opportunity to educate clients and give them the tools they need to protect their data. I usually start the conversation with ‘I don’t want to scare you, but ransomware is something you need to think about. Just politely preface the subject. It’s not a hard sell—once you educate, they get it.” -Frank Slattery, TeamLogic IT

TakeawayRansomware is a global cybersecurity problem that isn’t going away anytime soon. For MSPs, it can be a massive opportunity to be the hero as long as you pitch it the right way.

REPORT

Datto’s State of the Channel

Ransomware Report

YOU ALSO MIGHT BE INTERESTED IN:The Global State of the Channel Ransomware Report

1. Lack of Cybersecurity Awareness 3. Justifying the Cost of BCDR

2. Increase in Ransomware Attacks 4. Sophisticated Phishing Scams

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TAKEAWAYS• The average MSP is male, college-educated, and between the ages of 30 and 59.

No major surprises there.

• Most MSPs serve less than 100 clients, offer 1 year contracts, and still offer break-fix services in some shape or form.

• The majority of MSPs today focus their business efforts for a specific vertical (or verticals). More than 50% of MSPs specialize services for Healthcare companies.

• To keep on top of industry trends, MSPs subscribe to a variety of channel publications, including The Channel Co, Channel Futures, and Channel Partners.

• The majority of MSPs experience a short commute (less than 30 minutes) and rely on their own vehicles to get them to and from the office.

• The majority of MSPs are active daily on social networks, particularly Facebook, LinkedIn and Reddit.

• MSPs are across the globe are watching Game of Thrones, Stranger Things, and Black Mirror.

• When it comes to Star Wars versus Star Trek, the channel has spoken. For the majority of MSPs, the force is very much with Star Wars.

• The top business challenges for global MSPs: Marketing/Sales, Staffing/Training, Growing Pains, and Ransomware/Cybersecurity.

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ABOUT THE REPORTDatto’s 2018 State of the MSP Report is comprised of statistics pulled from a survey of roughly 2,300 managed service providers across the globe. To learn more about the results, please reach out to Katie Thornton, Senior Manager of Content Marketing at Datto, Inc.

ABOUT DATTOAt Datto, our mission is to empower the world’s small and medium-sized businesses

with the best in enterprise-level technology. We do it by equipping our unique

community of Managed Service Provider partners with the right products, tools

and knowledge to allow each and every customer to succeed. It’s an approach

that’s made us the world’s leading provider of MSP delivered IT solutions. Datto is

headquartered in Norwalk, CT, with offices worldwide.

Copyright © 2018 Datto Inc. All rights reserved.

Follow us on Twitter: @Datto

Cold Calling Made MSPeasy

Lead Generation Made MSPeasy

IT Staffing Made MSPeasy

Marketing Made MSPeasy

Sales Made MSPeasy

Pricing Made MSPeasy

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